Critical Comparison: Internet Initiative Japan (IIJI) vs. Yandex (YNDX)

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Internet Initiative Japan (NASDAQ: YNDX) and Yandex (NASDAQ:YNDX) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Profitability

This table compares Internet Initiative Japan and Yandex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Internet Initiative Japan 2.59% 6.49% 3.13%
Yandex 36.22% 12.72% 9.38%

Institutional and Insider Ownership

0.5% of Internet Initiative Japan shares are held by institutional investors. Comparatively, 68.2% of Yandex shares are held by institutional investors. 6.7% of Internet Initiative Japan shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Internet Initiative Japan and Yandex, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Internet Initiative Japan 0 0 0 0 N/A
Yandex 0 1 5 0 2.83

Yandex has a consensus price target of $43.24, suggesting a potential upside of 35.13%. Given Yandex’s higher possible upside, analysts plainly believe Yandex is more favorable than Internet Initiative Japan.

Dividends

Internet Initiative Japan pays an annual dividend of $0.09 per share and has a dividend yield of 0.9%. Yandex does not pay a dividend. Internet Initiative Japan pays out 17.3% of its earnings in the form of a dividend. Internet Initiative Japan has raised its dividend for 2 consecutive years.

Earnings & Valuation

This table compares Internet Initiative Japan and Yandex’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Internet Initiative Japan $1.59 billion 0.61 $45.98 million $0.52 19.96
Yandex $1.63 billion 6.43 $152.40 million $0.81 39.51

Yandex has higher revenue and earnings than Internet Initiative Japan. Internet Initiative Japan is trading at a lower price-to-earnings ratio than Yandex, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Internet Initiative Japan has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Yandex has a beta of 2.59, suggesting that its stock price is 159% more volatile than the S&P 500.

Summary

Yandex beats Internet Initiative Japan on 13 of the 16 factors compared between the two stocks.

About Internet Initiative Japan

Internet Initiative Japan Inc. offers Internet connectivity, WAN, outsourcing, systems integration, and equipment sales services in Japan. It operates in two segments, Network Services and Systems Integration Business, and ATM Operation Business. The company's Internet connectivity services for enterprise include IP services and IIJ data center connectivity services, IIJ FiberAccess/F and IIJ DSL/F services, IIJ mobile services, and dial-up access services, as well as other Internet connectivity services comprising IIJ ISDN/F and IIJ line management/F services. Its Internet connectivity services for consumers consist of various service, including ADSL, fiber optic, WiMAX, 3G, and LTE wireless data communication services under the IIJ4U, IIJmio, and hi-ho brand names. The company also offers WAN services, a closed network service primarily using dedicated lines, as well as wide-area Ethernet services and IP-VPN services to corporate customers; outsourcing services that comprise security-related, network-related, server-related, data center-related, and IIJ GIO/Hosting package services for non-customizable hosting package cloud computing services; and customer support and help desk solutions, and IP phone services. In addition, it provides systems integration services, which include consulting, project planning, systems design, and development of network systems, which focus on Internet business systems, and Intranet and Extranet corporate information systems; and systems operation and maintenance services. Further, the company sells routers, iPads, and other equipment, as well as software; and provides automated teller machine (ATM) services. As of June 30, 2017, it operated 30 primary points of presence (POP) for dedicated access and 1 universal POP for nationwide dial-up access; 27 Internet data centers; and 1,066 ATMs. The company was founded in 1992 and is headquartered in Tokyo, Japan.

About Yandex

Yandex N.V., an Internet and technology company, operates an Internet search engine in Russia and internationally. The company offers search, location-based, personalized, and mobile services that enable users to find information, and communicate and connect over the Internet from desktops and mobile devices. It provides geolocation services, such as Yandex.Maps, Yandex.Navigator, Yandex.Auto, and Yandex.Transport; Yandex.Mail that provides users access to their email accounts; Yandex.Disk, a cloud-based storage service; Yandex.News, an online news aggregation service; Yandex.Weather, a service that offers hyperlocal weather information; Yandex Browser for desktops and mobile platforms; and Yandex Search Apps. The company also provides Yandex.Direct, an auction-based advertising placement platform; Yandex Ad Network service; Yandex RTB, a programmatic advertising product; mobile advertising products; business directory; and Yandex.Market, an e-commerce gateway service. In addition, it offers Yandex.Taxi, a ride-sharing service; Auto.ru, a classified platform for used and new cars, commercial vehicles, and spare parts; Yandex.Realty, a real estate classifieds platform; Yandex.Jobs, a job search Website; and Yandex.Travel, a tour aggregator service. Further, it offers KinoPoisk, a Russian language Website for movies, TV series, celebrity content, and entertainment news; Yandex.Music, a music streaming service; Yandex.Afisha platform that allow users to buy tickets to cinemas, theaters, and concerts online; and Yandex.TV Program, a service providing users with an up to date schedule of broadcast, cable and digital TV channels, as well as an option to view certain TV channels online. Additionally, it offers Yandex Zen, a personal recommendation service; and Yandex Launcher that allows users to adapt their android phones to fit their style and fill it with content from all over the Internet. Yandex N.V. was incorporated in 2004 and is based in Schiphol, the Netherlands.

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